A national consumer group is urging Florida to keep its current insurance regulator, a man the group says is one of the best regulators in the country but who is rumored to be under pressure to resign by the Scott Administration.
The Consumer Federation of America (CFA) has reached out to the Florida Financial Services Commission in support of Florida Insurance Commissioner Kevin McCarty, following recent reports that second-term Governor Rick Scott is opposing McCarty’s reappointment.
J. Robert Hunter, CFA’s insurance director and former Texas insurance commissioner, addressed the Florida Financial Services Commission in a letter dated Jan. 21 asking the state not to remove McCarty from his position as insurance commissioner, saying McCarty has been a “consumer leader and insurance innovator in Florida.”
“As a consumer advocate who has worked in Florida insurance matters for over four decades, I write to urge against such action and, instead, that you keep Commissioner McCarty in this important position,” wrote Hunter.
Rumors of McCarty’s dismissal have been swirling in the Florida media. One report from the News Service of Florida said that Scott sent a letter to Chief Financial Officer Jeff Atwater earlier this week saying he hoped the state could “begin a search for new leadership” at the Office of Insurance Regulation, the Office of Financial Regulation and the Department of Revenue.
The Financial Services Commission is comprised of the governor and the three state Cabinet members: the attorney general, the chief financial officer and the commissioner of agriculture. The panel oversees the Office of Financial Regulation, which regulates the banking, finance and securities industries in Florida, and the Office of Insurance Regulation, which regulates insurance companies and is headed by McCarty. The four commission members appoint the commissioners of both offices. They are also responsible for final approval of rules developed by each office.
Hunter hopes that they will act to keep McCarty, he wrote in an email to Insurance Journal. “McCarty is very strong given his great track record,” wrote Hunter.
Hunter said it is not typical for a member of the CFA to reach out in support of an official because usually a state governor would make the final decision and no vote is needed.
“But perhaps more importantly, few commissioners are exceptional,” wrote Hunter to Insurance Journal. “McCarty is one of the 3 to 5 best commissioners in the nation over all of his time in office. We often disagreed with him, but he was fair.”
In his Jan. 21 letter, Hunter cited as an example of McCarty’s accomplishments the development and enhancement of the Florida Hurricane Catastrophe Fund (FHCF) “to offset severe price gouging by reinsurers who were charging prices up to five times the fair, actuarially sound level.”
“The plan was for Florida to take a level of risk at actuarial prices that would be self-sustaining over the long term. This has been a boon to Florida, having not only generated enough reserves to be able to handle the risk but generating reduced premiums for homeowners of approximately $20 billion since 2006,” Hunter wrote.
He also cited McCarty’s taking on of “issues of critical importance to Floridians” during his tenure as president of the National Association of Insurance Commissioners (NAIC), such as the creation of the Auto Insurance Study Group.
“It was, in fact, Commissioner McCarty, who when he was president of the NAIC, saw the importance of prioritizing the impact of high cost auto insurance on low- and moderate-income citizens in Florida and around the nation,” wrote Hunter to the commission.
The governor’s office has said simply there are “no announcements at this time” in regard to the OIR and McCarty.
McCarty has been Florida’s insurance commissioner since 2003 and has worked for the state for the past 26 years.
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